Evaluation of Market Thinness for Hogs and Pork

Jason Franken and Joe Parcell

No 285356, 2011 Conference, April 18-19, 2011, St. Louis, Missouri from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: We investigate thinness of hog and pork markets in terms of quantity and representativeness of negotiated transactions. Transactional volume imparts marginally greater confidence in pricing precision for Iowa-Southern Minnesota negotiated hogs than for the national carcass cut-out, suggesting that contracts tying prices to the former rather than the latter may be more representative of industry conditions. Extending mandatory price reporting to pork may remedy this discrepancy. Despite declining volume, terminal hog markets may price accurately off of Iowa-Southern Minnesota prices. Hog quality differentials across procurement methods are documented, and quality of negotiated hogs is shown to decline with volume.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2011-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nccc11:285356

DOI: 10.22004/ag.econ.285356

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